Opinion: The Modern Slavery Act’s impact on the travel industry

Industry consultant Andy Cooper says businesses in the travel sector might have to review their supply chain policies in the light of new government legislation designed to crack down on exploitative working practices

Have you heard of the Modern Slavery Act? It will impact on the travel industry.

As if businesses in the travel industry didn’t have enough to worry about, and report on, larger tour operators may soon face new requirements in relation to Modern Slavery.

It may have escaped your attention, and it certainly escaped mine, that shortly before the end of the last parliament the Modern Slavery Act 2015 was passed.

The Act introduced various new rules and restrictions aimed at preventing people trafficking and slavery, all of which seem both laudable and appropriate.

However, in the wording of the accompanying press release, there was also a provision to “require businesses over a certain size threshold to disclose each year what action they have taken to ensure there is no modern slavery in their business or supply chains”.

In particular, a business must describe the steps they have taken to ensure that slavery and human trafficking is not taking place in any of their supply chains or their own business, or they must disclose that they have taken no such steps.

This follows a recent trend in company reporting requirements which is seeing additional obligations imposed on companies to report on non-financial key performance indicators.

Quoted companies are now obliged to report on “environmental matters (including the impact of the company’s business on the environment); the company’s employees; and social, community and human rights issues, including information about any policies of the company in relation to those matters and the effectiveness of those policies.”

The government is currently consulting about implementing the Modern Slavery Act requirement into annual reports.

The only debate relates to the size of companies which will have the reporting requirement.

The government view is that the obligation should apply to “larger businesses”, on the basis that they should have the resources available to undertake due diligence and take action on the results.

The consultation seeks views on where the turnover threshold for reporting should be set, and puts forward four possible thresholds, with an indication of the likely number of companies falling within those thresholds.

Turnover threshold

Estimated total number of UK active companies whose turnovers exceed the threshold

£36 million

12,259

£250 million

2,554

£500 million

1,409

£1 billion

724

At the lower end of the scale, a significant number of travel businesses will fall into the reporting requirements.

The consultation also sets out the sort of areas which the government will expect to see contained in reporting.

These include providing a summary of supply chain management processes, and what steps are taken to ensure that there is no slavery occurring in the supply chain, as well as providing details on the business’s policy in relation to modern slavery.

I can hear you asking “So what? Slavery is not an issue which affects tourism“.

Whilst I am sure that we would all like to think that this was true, would you have any level of certainty about all the hotel staff in all the properties you work with?

What about the destination excursions you may offer, even if these are only sourced through a local agent in resort?

Those operations are part of your supply chain, and what confidence would you have on the terms and conditions of the people involved in delivering all parts of that supply chain.

Probably for most operators who only work in sun and beach destinations in western Europe, there is unlikely to be much of an issue, but once you look beyond those destinations, then the position becomes less clear.

We would all like to think that we would never work with any organisation that exploits its workforce to the extent to which they may be regarded as slaves or involved in forced labour, but how many of us can actually say that we have checked the position?

Or that relevant people in our businesses really know and understand the risks? Furthermore, how many companies in the travel and tourism industry actually have documented policies relating to modern slavery?

At the very least, this legislation will mean that all businesses will need to look at their documented policies and processes around this topic, as well as considering whether we should be questioning our supply chain in more detail.

There are some supply chain management tools out there which will help travel businesses.

I am thinking particularly of the Travelife sustainability system, run by Abta for travel businesses.

Accreditation for a Travelife award includes consideration of human rights issues, and it will be interesting to see whether the implementation of this legislation encourages more operators to work with Travelife.

In the short term, the government consultation on its implementation of the legislation closes on May 7.

Any travel business should give some thought as to whether it ought to reply to the consultation, as well as starting to think how the legislation may affect them.

If in doubt, you can always seek help in dealing with this.

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